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HomeMy WebLinkAbout78-013J Member Zaun introduced the following resolution and moved its adoption: RESOLUTION N0. 78-13 RESOLUTION AUTHORIZING THE SALE AND ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT TO FINANCE A PROJECT THEREUNDER, SECURED BY PAY- MENTS TO BE RECEIVED PURSUANT TO A MORTGAGE LOAN AGREEMENT AND A PLEDGE AND ASSIGNMENT OF THE CITY'S INTEREST IN THE MORTGAGE LOAN AGREEMENT AND PAYMENTS THEREUNDER TO A TRUSTEE, AND DESIG- NATING THE CITY REPRESENTATIVE FOR THE PROJECT WHEREAS, the Council by Resolution No. 77-73 duly passed November 28, 1977, gave preliminary approval to a proposal to under- take a Project with Merillat Industries, Inc. (the Company), a Michigan corporation, and approved the issuance of Industrial Develop- ment Revenue Bonds (the Bonds) in the amount of $3,000,000 to finance a Project, pursuant to the Municipal Industrial Development Act, Chapter 474, Minnesota Statutes (the Act); and WHEREAS, the Project consists of the acquisition of land and a vacant building, the construction of improvements to the building and the acquisition and installation of equipment and personal property all within the City for use by the Company in connection with its business of manufacture and sale of kitchen cabinets and bathroom vanities; and WHEREAS, pursuant to the Resolution giving preliminary approval to the Project the following documents relating to the Project have been submitted to the City Council for approval and are now on file in the office of the City Clerk: (a) Mortgage Loan Agreement, dated as of February 15, 1978 (the Loan Agreement), proposed to be made and entered into between the City and the Company; (b) Indenture of Trust, dated as of February 15, 1978 (the Indenture), proposed to be made and entered into between the City and The Marquette National Bank of Minneapolis, in Minneapolis , Minnesota, as Trustee (the Trustee) ; (c) Preliminary Offering Circular dated February 10, 1978, to be used for the offering and sale with respect to the Bonds; and (d) An Agreement Regarding Terms, dated as of February 21, 1978, (the Purchase Agreement), by and among the City, the Company and The Ohio Company (the Underwriter), pursuant to which the Underwriter agrees to purchase the Bonds. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville: 1. It is hereby found, determined and declared that: (a) the Project, as defined herein and in the Loan Agreement, constitutes a project authorized by Section 474.02, Subdivision 1 of the Act; (b) the purpose of the Project is and the effect thereof will be to promote the public welfare by encouraging the lo- cation, retention and development of economically sound industry and commerce within the City so as to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment; by promoting the use of available resources of the community thereby retaining the benefit of its existing investment in educational and public service facilities; by discouraging the movement of talented, educated personnel of mature age to other areas thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and by encouraging more intensive development of land available in the City to provide an adequate and better -balanced tax base to finance the increase in the amount and cost of governmental services; (c) the Project is to be located within the City limits, at a site which is readily accessible to employees residing within the City and the surrounding community; (d) the Project when completed will add to the tax base of the City and overlapping taxing jurisdictions; (e) the Project has been approved by the Commissioner of Securities of the State of Minnesota, as tending to further the purposes and policies of the Act; (f) the financing of the Project, the issuance and sale of the Bonds in the principal amount of $3,000,000, the execution and delivery of the Loan Agreement, the Indenture and the Purchase Agreement, and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Indenture and the Purchase Agree- ment and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Loan Agreement, the Indenture, the Purchase Agreement and the Bonds valid and binding obligations in accordance with their terms, are authorized by the Act; (g) it is desirable that a series of Industrial Development Revenue Bonds in the amount of $3,000,000 issued by the City upon the terms set forth in the Inden- -2- a ture, under the provision of which the City's interest in the Loan Agreement and the payments thereunder will be pledged to the Trustee as security for the payment of the principal, premium, if any, and interest on the Bonds; (h) the loan repayments contained in the Loan Agreement are fixed, and are required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of principal of and interest on all Bonds issued under the Indenture when due; and the Loan Agreement also provides that the Company is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insur- ance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project site and payable during the term of the Loan Agreement and pursuant to the Loan Agreement the Company has mortgaged and granted a security interest in certain described facilities comprising the Project; and (i) under the provisions of Section 474.10 of the Act and as provided in the Loan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds of the City other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon and no holders of the Bonds shall ever have the right to compel any exercise of the taxing powers of the City to pay any of the Bonds or the interest thereon nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except its interest in the Loan Agreement; each Bond issued under the Indenture shall recite that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and no Bond shall constitute a debt of the City within the meaning of any constitutional or statutory limitation. 2. The forms of the Loan Agreement, the Indenture and Purchase Agreement referred to above are approved, The Mayor and City Clerk are authorized and directed to execute the Loan Agreement in the name and on behalf of the City, upon execution thereof by the officers of the Company, to execute the Indenture in the name and on behalf of the City and deliver it to the Trustee, and to execute the Purchase Agreement upon execution thereof by the officers of the Company and Underwriter, such documents to be executed to be in the form hereinabove approved. Copies of all of the documents shall be delivered, filed and recorded as provided therein. -3- J 3. In anticipation of the collection of payments under the Loan Agreement, the City shall proceed forthwith to issue its Industrial Development Revenue Bonds (Merillat Industries, Inc. Project) Series 1978, dated as of February 15, 1978, in the principal amount of $3,000,000 in the form and upon the terms set forth in the Indenture, which terms are for this purpose incorporated herein and made a part hereof. The proposal of the Underwriter to purchase the Bonds at a price of $ plus accrued interest, upon the further terms and conditions set forth in the Indenture and the Purchase Agreement is hereby found and determined to be reasonable and is hereby accepted. The Mayor and City Clerk are authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee together with a certified copy of this resolution and such other documents as are required by the Indenture for authenticiation and delivery of the Bonds to the Underwriter. 4. The City hereby consents to the use of the Preliminary Offering Circular and a definitive form thereof by the Under- writer in connection with the offering and sale of the Bonds; provided, however, the City assumes no responsibility for the completeness or accuracy of the information contained therein. 5. The Mayor and City Clerk and other officers of the City are authorized and directed to prepare and furnish to the Underwriter, certified copies of all proceedings and records of the City relating to the Bonds, and such other documents, affidavits and certificates as may reasonably be required by bond counsel to show the facts relating to the legality and marketability of the Bonds as such facts appear from the books and records in the officers' custody and control or are otherwise known to them, and all such certified copies, documents, certificates and affidavits, including any heretofore furnished, shall constitute repre- sentations of the City as to the truth of all statements contained therein. 6. The City hereby elects to issue the Bonds as industrial development bonds in the aggregate face amount in excess of $1,000,000 but not in excess of $5,000,000 pursuant to Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, and the City Clerk is authorized and directed to file a statement of said election with the Internal Revenue Service in the form and manner required by Section 103(b)(6)(D) and the regulations relating thereto. 7. The approval hereby given to the various documents referred to above includes an approval of such additional details therein as may be necessary and appropriate and such modifications thereto, deletions therefrom and additions -4- J, thereto as may be necessary and appropriate and not to the prejudice or the interest of the City, and approved by the Mayor and City Attorney prior to the execution of the docu- ments. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms thereof. In the absence of the Mayor or City Clerk, any of the documents authorized by this resolution to be executed, may be executed by the acting Mayor or acting City Clerk, respectively. 8. The City Clerk is hereby designated as the Municipal Representative for all purposes of the Loan Agreement and the Indenture, with full authority to do on behalf of the City, all those things required or authorized in the Loan Agreement and the Indenture, to be done by action or cer- tificate of the City Representative. May Attest City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Member Nelsen , and upon vote being taken thereon, the following voted in favor thereof: Spande, Lekson, Curry, Zaun, Nelsen and the following voted against the sale: None whereupon said resolution was declared 'duly passed and adopted. -5-